Will the unemployment rate (U-3) be above 4.2% in August?
Most current forecasts stop at 4.1% or 4.2%, so an August U-3 unemployment rate above 4.2% is a long shot.
Late forecasts cluster at 4.1% or 4.2%, and both readings fail the requirement that unemployment be above 4.2%. Falling jobless claims and improved consumer assessments of current employment conditions reinforce that picture. Payroll contraction, downward revisions and rising temporary layoffs show genuine labor-market weakness, but weak labor-force growth can prevent that weakness from lifting U-3. An above-threshold reading remains possible through household-survey volatility or a stronger participation rebound, but it is a long shot.
- Late forecasts are concentrated at readings that would not clear the threshold.On August 31, the general expectation was 4.1%, with a forecast range of 4.0% to 4.2% and major-bank estimates at 4.1% or 4.2%.
- The Chicago Fed’s real-time estimate remains below the required level.On August 27, the Chicago Fed estimated August unemployment at 4.10%, little changed from July.
- Recent unemployment claims do not indicate a sudden August layoff surge.Seasonally adjusted initial unemployment claims fell to 203,000 in the week ending August 22.
- Payroll contraction and large downward revisions indicate greater labor-market weakness than earlier reports showed.A report published August 31 said employers cut 23,000 jobs in July and revisions removed another 103,000 jobs from May and June payrolls.
- The rise in temporary layoffs creates some risk that household unemployment increased further.In July, the number of people on temporary layoff rose by 153,000 to 921,000.
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